Report: More U.S. Households Shopping Online

By Lori Enos
Nov 9, 2000 12:00 AM PT

Significantly more U.S. households are buying products on the Web, with the percentage jumping to 34 percent from 24 percent just a year ago, according to a survey released Wednesday by The Conference Board and NFO Research.

The study also found that while older Americans are buying online in ever-increasing numbers, the online shopping scene is still dominated by those under the age of 35.

"More Americans in all age and income groups are buying online, but Internet activity is still heavily driven by the young and the affluent," said Lynn Franco, Director of The Conference Board's Consumer Research Center.

The 'Generation X' Factor

When it comes to online shopping, age does matter. According to the survey, the group most likely to shop online are adults aged 25 to 34, with 55 percent of that sector purchasing something online this year, compared to 40 percent a year ago.

Among 35 to 44 year-olds, 45 percent had shopped online, up from 33 percent last year.

The segment least likely to make an online purchase are consumers 65 and older, with just 10 percent having spent online, compared to 8 percent last year.

Connected Seniors Do Surf and Spend

Although NFO's research shows that seniors are less likely to shop online than their younger counterparts, an earlier study conducted by Greenfield Online found that once seniors get online, they are more likely than their younger counterparts to shop.

The Greenfield survey found that a whopping 93 percent of connected seniors had shopped online, compared to 78 percent of the general Internet population. According to Greenfield's findings, seniors with access to the Internet are more than ready to surf and spend.

Pacific Region Shoppers Lead Way

Where someone lives -- and how much he or she earns -- also affects online purchasing behavior, according to NFO's research.

The NFO study found that U.S. residents in the Pacific region were the most likely to shop online, with 42 percent of those households having shopped online this year, compared to 31 percent last year.

The percentage of online shoppers in the Mountain states is also reaching new heights, with nearly 38 percent of residents in those states making online purchases this year, up from last year's 26 percent.

In New England, 29 percent of households shopped online, compared to 30 percent last year.

More Disposable Income on the Web

Not surprisingly, more U.S. households with annual income in excess of $50,000 a year made online purchases this year than last -- 53 percent this year, up from 40 percent last year.

The other income brackets also saw increased percentages of households spending online. About 35 percent of households earning between $35,000 and $49,999 made online purchases this year, up from 27 percent.

Among households earning $25,000 to $34,999, the percentage making online purchases also increased, from less than 18 percent last year to 29 percent this year.

What's Selling

Books were the No. 1 online purchase for the second year in a row, with a approximately 45 percent of respondents having purchased at least one book online both this year and last year. Travel-related purchases climbed to No. 2, claiming the money of nearly 30 percent of consumers this year, up from less than 26 percent, NFO's research revealed.

The third most popular item on the Web -- both this year and last -- was CDs. In both NFO surveys, 27 percent of respondents bought CDs online.

Slipping into the No. 4 slot was computer hardware and software, with 26 percent of respondents purchasing a computer-related item from the Web, down from 32 percent last year, NFO said.

Spending Patterns

Online consumers are spending slightly more this year than last, but remain conservative. This year, 28 percent of Americans said their largest purchase was $50 or less (US$), in contrast to 34 percent last year who fell into that price bracket.

An additional 33 percent of households, only a slight improvement from last year, said they spent between $50 and $199 online. Slightly more than 10 percent of Web shoppers spent between $200 and $299 online, up from less than 9 percent.

Almost 11 percent of respondents said they had spent more than $1,000 online, up from 8 percent.

Security Still an Obstacle

Slightly more Americans are concerned about both price and security this year. About 65 percent of shoppers this year, compared to 62 percent last year, said that price played a major role in their online purchasing decisions.

The next point of concern for shoppers is online security. More than 56 percent cited security as a key factor this year, up slightly from 55 percent who said so last year.

"Competitive prices and increased security are the two keys to building repeat business. Internet consumers cite both issues as being the major factors regarding their future online transactions. For those yet to break the e-commerce barrier, security and pricing issues also remain the key deterrents," The Conference Board's Franco said.